Silgan, Virgin Mobile, Gray TV set price talk; GGP regains ground as some expect light price cut

By Sara Rosenberg

New York, June 6 - Opening pricing on Silgan Holding Inc.'s $1 billion credit facility (Ba3) surfaced as the mostly pro rata deal launched to lenders via a bank meeting Monday. Also, Virgin Mobile Holding plc and Gray Television Inc. set price talk on their new deals as syndication officially kicked off on Monday as well.

Meanwhile, in the secondary, General Growth Properties Inc.'s (GGP) term loan B traded back up a little indicating that the market thinks that the repricing set to launch on Tuesday will not be all that much of a spread cut for investors.

Silgan price talk surfaced with the launch of the new deal, with the $225 million term loan B talked at Libor plus 150 basis points, the $325 million term loan A talked at Libor plus 112.5 basis points and the $450 million revolver talked at Libor plus 112.5 basis points, according to a market source.

The term loan B is being offered to investors at par.

Deutsche Bank Securities Inc. and Banc of America Securities LLC are the lead banks on the deal, with Deutsche the left lead.

Proceeds from the new facility will be used to refinance the company's existing senior secured credit facility.

Through this new deal, Silgan hopes to get lower interest rate margins based on its strengthening credit statistics and favorable market conditions, extend maturities and amortization periods, and gain more covenant flexibility.

Silgan is a Stamford, Conn., supplier of consumer goods packaging products.

Virgin Mobile pricing

Virgin Mobile came out with opening pricing of Libor plus 325 basis points on its $100 million five-year revolver and Libor plus 350 basis points on its $500 million 61/2-year term loan B at its bank meeting Monday, according to a market source.

JPMorgan and Merrill Lynch are joint lead arrangers on the deal, with JPMorgan the left lead.

Proceeds from the proposed $600 million credit facility (B3/B-) will be used for a recapitalization that includes making a dividend payment and refinancing existing debt.

Virgin Mobile is a United Kingdom-based mobile virtual network operator.

Gray Television sets talk

Gray Television also came out with opening pricing as it too held a bank meeting Monday to launch its proposed $400 million senior secured credit facility (Ba1) into general syndication.

The $100 million six-year revolver and $100 million six-year term loan A were both launched with opening pricing levels of Libor plus 125 basis points, and the $200 million 71/2-year term loan B was launched with an opening pricing level of Libor plus 150 basis points, according to a market source.

Wachovia is the lead bank on the deal that will be used to refinance the company's existing credit facility.

Although the credit facility did not officially launch until Monday, the syndicate had already started talking to accounts about the proposed transaction over the past couple of days.

Gray Television is an Atlanta-based communications company.

GGP rebounds

General Growth Properties' term loan B was trading around par ½ on Monday, with some putting closing levels at par 5/8 bid, par ¾ offered and others putting closing levels at par 3/8 bid, par 5/8 offered - either way higher than Friday's levels of par bid, par ½ offered that surfaced on news that the company would relaunch its repricing proposal.

On Friday, market sources had heard that the company would be holding a conference call on Tuesday regarding repricing its $2 billion four-year term loan at Libor plus 175 basis points from Libor plus 225 basis points, which was the same repricing request that was first announced in April and then pulled.

The difference this time around is that General Growth Properties has now enlisted the help of underwriters - Credit Suisse First Boston, Lehman Brothers, Wachovia and Bank of America - to help get the deal done as opposed to approaching investors directly.

However, with the performance of the term loan B bank debt in Monday's market some are now questioning whether the repricing amendment will really call for a reduction to Libor plus 175 basis points.

"My guess is that the repricing isn't as great as people thought it would be," one trader remarked. "Maybe they're only going to take it to 200."

"It moved up only because guys think that the company is not going to take it too low," another trader said. "No one knows where they're taking it to. Not traders. Not agents. But the price indicates that the market thinks it won't be so bad."

General Growth Properties is a Chicago-based regional shopping mall real estate investment trust.

Berry closes

Berry Plastics Corp. has completed its acquisition of Kerr Group Inc., a Lancaster, Pa.-based maker of plastic packaging, from Fremont Partners for $445 million, including the repayment of existing debt, according to a news release.

To fund this acquisition, Berry added a new $465 million term loan C into its existing credit facility and priced the tranche with an interest rate of Libor plus 225 basis points.

Berry also amended it revolver and upsized the tranche to $150 million revolver from $100 million.

The company's existing term loan B, which according to a recent 10-Q filing is now sized around $330 million, is remaining in place, as is.

Goldman Sachs & Co. and JPMorgan acted as the lead banks on the new $615 million bank deal (B1/B+).

The Evansville, Ind., maker of plastic containers said that on a pro forma basis its leverage is will be similar to the level after its acquisition by Goldman Sachs Capital Partners and JP Morgan Partners in July 2002 and after it acquired Landis Plastics in November 2003.

Rock-Tenn closes

Rock-Tenn Co. closed on its new $700 million five-year credit facility (BB) consisting of a $250 million term loan and a $450 million revolver.

Wachovia Capital Markets LLC, SunTrust Capital Markets Inc. and Banc of America Securities were the lead banks on the deal.

Proceeds were used to help fund the acquisition of the assets of Gulf States' Paperboard and Packaging business.

"The acquisition of the Demopolis mill gives us entry into the production of the premium paperboard substrate of the folding carton industry. We believe that there are significant cost saving opportunities from optimizing our folding carton operations. We also believe that we will be able to generate a significant amount of free cash flow that we expect to use primarily to pay down debt, as we have targeted a debt reduction goal of $180 million by September 2007," said James A. Rubright, chairman and chief executive officer, in a company news release.

Rock-Tenn is a Norcross, Ga., manufacturer of recycled paperboard, folding cartons and promotional displays.

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